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What terminal cash flow should Marbella use

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Question - Marbella, Inc. plans to purchase new equipment for its manufacturing plant for a total cost of $500,000. The equipment will be depreciated to a salvage value of $100,000 over 4 years and is expected to be sold for its salvage value at the end of year 4.  In addition, Marbella plans to immediately purchase $5,000 of new spare parts for the machinery in the plant. What terminal cash flow (TCF) should Marbella use in year 4 of its capital budgeting analysis if the project is expected to last 4 years?

Reference no: EM133012391

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